Public policy, public investment, and private investment in seed supply - Experiences in Turkey and India

Many African countries have sought to encourage private sector participation in the seed industry by liberalizing input markers and privatizing government parastatals. However, in many cases the private sector has been unable to respond fully to these initiatives, either because policies have not actually been reformed or-because the private sector is not yet sufficiently developed. This paper draws on recent experiences with seed policy reform in India and Turkey to identify the key policy and institutional reforms that encouraged growth in the private seed sector. The reforms in Turkey and India allowed seed prices to rise, permitted new firms to enter the seed industry, and reduced restrictions on imports of varieties and seed. Large-scale private firms entered the most profitable sectors (hybrid seed), while less profitable sectors were left to small seed companies, farmers, and the public sector. In some cases, as in Punjab, the combination of small seed companies and farmers was more efficient than the public sector in rapidly spreading new varieties. The liberalization process in Southern and Eastern Africa, with a few exceptions, has not advanced very far. A number of policy restrictions militate against private sector development. We conclude that private companies in Southern and Eastern Africa will supply seed of hybrid crops if governments lift seed price controls; allow grain prices to rise to near world market levels; eliminate government monopolies on varietal research, seed production, and marketing; and develop clear and stable policies. Government parastatals need not be privatized, but their subsidies should be reduced to allow the private sector to compete. Public research must continue to develop, import, and test new varieties of open-pollinated crops, where substantial private investment is unlikely. In addition, governments must continue to multiply early-generation seed, to ensure that enough seed is available for small seed companies, farmers, and other seed producers to multiply.